Ownership & Legal for Transport in the Evaluate Stage

Objective

Evaluate potential legal and ownership requirements for the pipeline network operator. Implement contractual framework for Feasibility Study works. 

Key Deliverables

• Legal input to deliverables from all other relevant workstreams, including Pipeline Route Selection, Stakeholder and External Relations, Environment and Health and Safety, Project Delivery, Operations, IP management, Risk and Funding
• Reports mapping out legal evaluation of options and recommendations of strategy on key consents and compliance issues, key potential liabilities, route selection, contracting strategy and corporate and funding structure

Tasks

Compliance and regulatory issues

• Identify key consents.  These will include:
• Pipeline authorisations
• HV Grid connection for compressor station
• Environmental permit/s
• Development planning permissions
• Any development planning agreements
• If going offshore, ports and harbours consents, marine licences and navigation consents
• Input to stakeholder management plan on legal requirements surrounding engagement with particular regard to any international stakeholders and the need to engage them as early as possible
• Evaluation of the key consents options, considering: 
• The timelines for their issue
• Any options in how consenting can be structured, for instance if there is more than one consenting regime under which key consents may be obtained, or the extent to which one regime can apply across more than one element of capture, transport and storage
• Potential for consistency of conditions across different regimes
• Phasing of the project and its impact on timelines and consent strategy
• Impacts of planning agreements or community benefit requirements, including any need to have third party land interests sign up to planning agreements
• Certainty of project infrastructure and any flexibility of description of development to be consented
• Impacts of any other requirements on consenting strategy e.g. environmental impact assessment requirements
• Link to the same evaluation process for capture and storage to produce table of key inter-dependencies and evaluation of consenting process across the entire project
• Evaluate risks and opportunities of third party access to pipelines
• Advice on liability in the event of pipeline or compressor station failure and feed into risk register

Property issues

• Further due diligence on legal constraints to extent not already done at 'Identify' stage i.e. assessment of:
• Third party rights over the land and seabed if relevant (including the need for any private third party consents and crossing agreements)
• Conditions/restraints/obligations attaching the land and seabed if relevant and their impact on the project (including exit strategy)
• Input outcomes to preferred site decision on route selection

Contractual issues

• Negotiate contracts with and appoint FEED contractors and other external advisers necessary at this stage 
• Evaluate alternative procurement models, connecting into consideration under Project Delivery and decision on recommended delivery option.  Issues to consider include:
• An EPC approach
• How a 'wrap' could be achieved from an EPC contractor, taking into account e.g.:
• The complex services performed by the professional team
• Differing levels of covenant strength and liability caps
• Commercial bargaining power of key equipment suppliers
• How technology risk is to be dealt with
• Management of changes in permitting requirements caused by design development
• Interface arrangements between contracting parties involved at transport stage, plus those involved in capture and storage: delayed or poor performance of one will impact on others
• Input results of evaluation of procurement models to project implementation plan 
• Evaluate options for operation and maintenance and input to consideration under 'Operations' workstream.  Issue to consider include:
• The extent to which an Operator will take revenue risk and, where this is limited, how gaps in liabilities will be covered
• Outage arrangements – i.e. back up methods
• Ongoing performance testing and monitoring requirements
• Availability of necessary operatives and bargaining power
• Interface arrangements with any EPC Contractor, plus those involved in Transport and Storage: delayed or poor performance of one will impact on others
• Input results of evaluation to options appraisal produced from 'Operations' workstream
• Evaluate insurance as a method of risk allocation and management

Corporate structures and funding

• Evaluate corporate structuring options, considering:
• The funding alternatives
• Tax and accounting issues
• Sharing/mitigation of risk
• Sharing of knowhow/expertise
• Any split of the rights/obligations relating to each part of the project, i.e. capture, transportation and storage
• Possibility of sell-down
• Flexibility in structure going forward to account for changes in government policy and perceived risk
• Input to consideration of organisation structure under 'Operations' workstream
•  Evaluate funding structuring options, including security and guarantee structures

Other tasks

• Summarise options appraisal under all of the above headings and input to the feasibility study under the 'Risk' workstream, including an appraisal of degree of risk, identification of any fatal flaws, potential mitigations and detailed responses on extreme and high risks
• Legal evaluation of options for structuring of intellectual property rights with technology provider and among project partners
• Legal evaluation of options for industrial relations, employee relations and workforce strategy

Examples

Key Personnel

• Project Manager
• Legal Counsel
• Commercial Lead
• Procurement Lead
• Engineering Lead